Alternatives To Bankruptcy With Student Debt

When you find it increasingly difficult to pay off your student loans, filing bankruptcy may seem like a good or, in fact, the only solution to your financial problems. But is bankruptcy really good or the only solution
 
Feb. 3, 2012 - PRLog -- When you find it increasingly difficult to pay off your student loans, filing bankruptcy may seem like a good or, in fact, the only solution to your financial problems. But is bankruptcy really good or the only solution, or you may apply for a student debt consolidation loan? Or there may be a better alternative to getting rid of debt?

There are a number of alternatives to bankruptcy, among which filing a consumer proposal and debt consolidation. What you can do first is find a provincial or Canadian student loan provider, be it a credit union, the government bank. Discuss various payment arrangements with them. If this is unlikely to work, the next debt management solution to try is debt consolidation. The main benefit to this arrangement is that it helps reduce your monthly bills. Notably, a lot of debt relief companies out there feature services for tasks you can handle on your own. If you have to choose a debt consolidation company, pick one that offers services you can't take care by yourself. Some of the consolidation companies negotiate reduced balances and fees and provide credit counseling. Others can help you obtain an additional mortgage as a way to repay your student debts. If this sounds like a good idea, you may consolidate your student loans into a single loan - http://www.canadabanks.net/default.aspx?article=Student+L... . Your payments will be considerably lower, sometimes by 60 percent.

How much is this arrangement going to cost you? Unfortunately, it increases the life of your loan and thus the total amount you owe. Be sure to check the interest rate and terms of your loan.

If taking out a consolidation loan is not an option, you may want to file a consumer proposal. This strategy is likely to work if you have a steady job, which allows you to repay a portion of your debt. You have to use the services of a licensed bankruptcy trustee as to file a consumer proposal. They will look at your financial circumstances and give advice on how to manage your loans. In general, filing a consumer proposal costs less than credit counseling and is one alternative to the latter. It stands for a legal arrangement that allows debtors to repay a portion of their debts, thus getting rid of them. The details of this arrangement depend on the province or territory where you live. In Ontario, for example, your student loan has to be less than seven years old - http://www.canadabanks.net/default.aspx?article=How+to+Co...

A consumer proposal represents a negotiated settlement and a legally binding procedure for both the debtor and creditor. At the same time, you should prove that you are able to make monthly payments. The benefits of a consumer proposal are many - you are not required to surrender any of your assets and avoid bankruptcy. Creditors are not allowed to initiate legal action, too. Wage garnishment orders are stopped and interest frozen after you file a consumer proposal.

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